Most people find the buying process in Mexico to be an extremely professional and pleasant
experience. The most important part of this process is to make sure that you are represented by
experienced people such as your realtor and lawyer. In Mexico it is always wise to ask for a referral
to find the most qualified person to represent you.
HOW DO I PURCHASE PROPERTY IN MEXICO?
You can purchase property located within 100 kilometers of any border or within 50 kilometers of the coastline through either a bank trust or by creating a Mexican corporation.
FOR ALL RESIDENTIAL/TOURISM PROPERTY : BANK TRUST OR FIDEICOMISO
The fideicomiso (bank trust) is a trust agreement that you establish with a bank in order to hold title to a property (both you and the bank are named in the title documents). This trust deed assures foreign property buyers of all the rights and privileges of ownership.
Advantages of the fideicomiso:
- Allows the property owner to hold the property in perpetuity.
- The fideicomiso is a 50-year trust agreement that is renewable every 50- years by you or your heirs.
- You can transfer your rights in the fideicomiso to another foreign buyer.
- One contract can hold more than one property in the same deed.
- You may rent, sell or remodel the property.
- Your heirs can inherit the rights to the fideicomiso, effectively by-passing probate, should you depart without a proper will.
- There are tax advantages pertaining to capital gains taxes when you sell.
- The fideicomiso is easy to maintain by paying an annual fee to the bank.
FOR ALL COMMERCIAL/TOURISM PROPERTY : FOMC (Foreign Owned Mexican Corporation)
The FOMC is a vehicle that allows foreigners to open a business, work in Mexico and since it is a Mexican entity, it can hold direct title ownership to real estate. We can help you set up your corporation.
It will be crucial to know what your goals are in respect to the property, business and type of investment prior to setting up the corporation. Creating the corporation requires a minimum of two individuals (shareholders), of any nationality, which are at least 18 years of age. One of the shareholders will be required to be the managing partner. The managing partner will be required to acquire and maintain an FM-3 or FM-2 visa. This visa must be renewed every year. Additionally, the corporation is required to make monthly reports to HACIENDA (the Mexican Department of the Treasury) reporting income and expenditures. The reporting needs to be done by a certified accountant.
Advantages of the FOMC:
- Allows for the purchase of properties larger than 2000 square metres.
- No limit to the number of properties it may own.
- Allows for one or more of the shareholders to legally live and work in Mexico year roun
- Requires a managing partner with a FM-3/FM-2 Visa.
- Monthly reporting of financial activity through a certified accountant.
THE CLOSING PROCESS WHEN USING A BANK TRUST
It normally takes 30 business days from the date Inter Lex Mexico starts the paperwork until you are able to take title. It is very important that the buyer supply all the necessary documents in a timely manner in order to close on time.
Such documents include:
- Copy of your passport
- Copy of a recent utility bill showing your home address
- Plus the completion of the buyers data form provided by Inter Lex Mexico
- You will need to make the first payment towards the legal services proposal and the initial payment to set up the bank trust.
Once the lawyer has all of the buyers information and the initial payments have been made, they will start the process with the trust bank by ordering the Permit from the Secretary of the Foreign Relations Office. This process takes approximately 10 business days. During this time the lawyer will also be starting the title search and the review of the title history of the property. In addition, all permits and certifications needed for the closing will be collected from the municipal and state authorities.
When the bank has received the permit from the Secretary of the Foreign Relations Office your lawyer will then start the drafts for the actual closing deed. The final deed will then be reviewed by the three legal groups working for you - the lawyer , the Notario and the trust area of the bank. This works to ensure that everything is 100% correct. When all of the closing paperwork is ready, you will then be notified of the actual date of closing and the final amount of the closing costs. Normally the total closing costs will run approximately 5 to 6 % of the purchase price.
THE CLOSING PROCESS THROUGH FOMC
In a Mexican corporation for all non-residential or tourism/residential real estate, foreign nationals can be 100% the sole and exclusive stockholders of this entity. The corporation is a Mexican entity, and as such, has the right to hold direct ownership/title to real estate in the restricted zone: (100km. along all borders, 50 km. along all coastlines.)
- It is important to know what your goals are in respect to the property, business and type of investment prior to setting up the corporation.
- Creating the corporation requires a minimum of two individuals (stockholders), of any nationalities, who are at least 18-years of age.
- One of the stockholders will be required to be the managing partner. The managing partner will be required to acquire and maintain an FM-3 visa. The visa must be renewed every year.
- Allows for one or more of the stockholders to legally live and work in Mexico year round.
- The corporation is required to make monthly reports to HACIENDA (the Mexican Department of the Treasury/Local Tax Offices) reporting income expenditures or dormant state. The reporting needs to be done by a Mexican public accountant every month.
- In any type of real estate acquisition in Mexico, non-Mexican purchasers must always register their ownership interest with the Secretary of Foreign Affairs.
When closing through a FOMC the normal time frame will be 7 to 15 business days.
After closing, the Public Notary issues a notarized copy of the closing deed. This document will be your first proof of ownership. You can use this document to change your utility accounts. You may also employ us to provide this service. The final deed will be issued to you by the Public Registry within three months.